Intel-TSMC Joint Venture Faces Anti-Trust Concerns as US Manufacturing Strategy Evolves
Investment bank Jefferies has raised concerns about a potential Intel-TSMC joint venture, suggesting that such a move could face anti-trust scrutiny. Instead, the bank believes that TSMC is more likely to establish a packaging facility in the US rather than collaborate directly with Intel on advanced semiconductor manufacturing.
These speculations come after Intel’s stock surged by 25% in the past five days following US Vice President JD Vance's remarks in Paris about the administration’s focus on boosting domestic semiconductor production, particularly in the AI chip sector. With growing anticipation that Intel may regain its position as a leader in chip manufacturing technology, investors remain optimistic. However, Jefferies remains cautious, highlighting the likelihood of TSMC reinforcing its presence in the US through packaging facilities instead of a full-fledged manufacturing partnership with Intel.
Intel’s Manufacturing Struggles & Strategic Shift
Intel’s 18A process technology remains a critical focus for the company as it aims to strengthen its foundry business and regain leadership in semiconductor manufacturing. The departure of former CEO Patrick Gelsinger has also fueled speculation about a possible restructuring, including the potential spinoff of its manufacturing division to focus more on chip design and financial stability.
Recently, Vice President JD Vance hinted at an AI summit that the Trump administration aims to manufacture leading-edge AI chips within the US. This announcement further intensified speculation, especially after TSMC executives held a meeting in the US, potentially discussing expanded operations.
Potential Scenarios for US Chip Manufacturing
Jefferies has outlined three possible outcomes in response to the US administration’s semiconductor manufacturing strategy:
TSMC building a new packaging facility in the US – This move would help eliminate packaging bottlenecks that currently require chips made in Arizona to be sent back to Taiwan for final assembly.
A joint venture between TSMC and Intel – This would enable the transfer of advanced chip manufacturing technology to US soil, addressing concerns over delays in Intel’s foundry business.
Intel acquiring TSMC’s packaging contracts – This would leverage Intel’s existing packaging capabilities while still allowing TSMC to retain control over its cutting-edge chip production.
Among these possibilities, Jefferies believes that the first option (a US-based TSMC packaging facility) is the most probable scenario. This would ensure that advanced AI chips can be assembled and shipped directly within the US, aligning with the Biden administration’s and Trump administration’s efforts to enhance domestic semiconductor production.
Challenges & the Future of US-Based Chip Manufacturing
One of the biggest bottlenecks in TSMC’s US operations is chip packaging. While its Arizona facility can manufacture chips using 4nm process technology, they still need to be shipped back to Taiwan for packaging, delaying production cycles. Intel, however, possesses advanced packaging capabilities that have not suffered from the same setbacks as its manufacturing processes, making a potential Intel-TSMC partnership appealing from a logistical standpoint.
However, Jefferies remains skeptical about Intel and TSMC collaborating directly due to regulatory hurdles and potential anti-trust concerns. The firm believes that TSMC will likely focus on a packaging facility rather than forming a joint venture with Intel, ensuring that the most advanced AI chips are fully produced and packaged within the US.
While TSMC’s most advanced 2nm process technology is expected to remain exclusive to Taiwan, AI chips often rely on older nodes due to power constraints. This means that TSMC’s Arizona facility can still manufacture cutting-edge chips, particularly for GPU leader NVIDIA, which relies heavily on TSMC for its production.
A Transforming Semiconductor Landscape
As US-China trade tensions continue to influence semiconductor strategies, the competition between Intel and TSMC is entering a new phase. With both companies vying for leadership in advanced chip manufacturing and AI development, the next few years will be crucial in determining the direction of US semiconductor production.
What do you think about Intel’s potential collaboration with TSMC? Should the US government push for a joint venture, or is a standalone TSMC packaging facility the better route? Share your thoughts in the comments!
